IBM, Time Warner retiree changes to health care called harbingers of a trend

(CBS News) IBM says it's moving more than 100,000 retirees off its company-sponsored health plan. Instead, the tech company will give them money to buy coverage from a health insurance exchange.

And IBM isn't alone. Media giant Time Warner is now planning its own changes to retirees' health care.

IBM moving some retirees off its health plan

The changes are "absolutely" a trend, according to CBS News contributor and analyst Mellody Hobson.

But how does this change affect retirees?

In the short-term, Hobson explained, it's probably a neutral decision because IBM is saying health care coverage should be as good or better than what they're currently getting because they'll have more choice.

Hobson added: "Over the long-term, if -- and there's a big 'if' on this -- if it works, the health care costs should come down. And the reason that I say if, for this to work, you need to get young people into these exchanges in order to offset the older people who use more health care services."

When retirees are acclimated to the idea, they get "pretty comfortable," Hobson said. "It's not really a situation where they're worse off. They just now have control.

"It reminds me very much of what happened with pensions," Hobson said. "We went from situations where they would manage your retirement money for you and they went to a defined contribution plan where they give you a set amount and then you make the decisions. We're seeing the exact same thing right now. It's not necessarily good or bad. It's just different."

For more with Hobson, watch her full analysis above.

  • Amanda Cochran

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